Just when I was getting excited about China’s first capsule hotel, the fire authorities in Shanghai have refused to issue an operating license.

The refusal was mainly due to fire and personal safety concerns. Apparently, the capsules were found to be made of highly flammable materials. In addition, inspectors said that the average space for each guest, which is measured at 2.4 square meters, did not meet the city’s basic requirement for renting houses and may pose difficulties for emergency evacuation.

The “Xitai Capsule Hotel” was set to be China’s first capsule hotel. The hotel features 68 cabinet-sized rooms imported from Japan – where capsule hotels originated – each equipped with a power point, clock, light, television and wireless Internet. The hotel is only opened to men with shared lavatory and shower facilities. It also has a designated area for snoring guests.

The hotel planned on charging 68 yuan ($10) for 10 hours or 88 yuan for 24 hours which is very cheap – even compared to budget hotels in China.

Ta Zan, the owner of the hotel who used to work for capsule hotels in Japan, said that without a license, he had never booked a guest since construction was completed last October. Ta regretted the denial of a license, but said that he would not give up the idea of opening capsule hotels in China.